How Much Revenue Does Xbox Generate For Microsoft?

Consistently ranking as one of the top-selling game consoles every year since it was released in 2003, the Xbox has seen its share of competition over the years. Starting with Nintendo’s GameCube in 2004 and continuing onto current generation systems like the PlayStation 4 and new Wii U iterations, the competition is always strong to keep the Xbox brand name at the forefront.

Not only does the company make games for the console, but they also produce software and services such as Netflix for users. The latter two have become increasingly important as people tend to use their phones for less entertainment purposes and instead rely more heavily on online streaming content.

The influence that these products have on the gaming industry cannot be understated as companies look to emulate what has worked for them before. A large chunk comes from the success that Microsoft has found in advertising through channels such as YouTube and Twitch.

They have been able to capitalize on the popularity of video games by creating platforms where gamers can show off their skills or find other players nearby. These are both valuable resources for anyone looking to start playing games or just improve their own skill set, making the service worth investing in.

This article will talk about how much revenue the Xbox division at Microsoft generates annually as well as some insights into why this number is so high.

Second, the company announced new Xbox consoles

how much revenue does xbox generate for microsoft

The company also revealed two new console lines at its press conference. One is an upgraded version of their current flagship system, the PlayStation 4 (or PS4 as it’s sometimes referred to). This will be called the Pro or Elite line depending on whether you choose the 1TB or 2TB model.

The other is what they are calling the “lifestyle” console. This will be targeted more at people who enjoy gaming but don’t necessarily play very frequently. It will feature lower-quality graphics that can easily be replaced, along with limited storage space.

Third, the company announced new partnerships

how much revenue does xbox generate for microsoft

In November of last year, Microsoft revealed that it would be partnering up with Major League Baseball (MLB) to launch an official MLB Game Mode for its console gaming platform. Since then, the two have been working together to develop this new game mode.

Not only does this new feature offer full-length games featuring the most popular professional baseball leagues across America, but it also gives players access to all 30 teams!

This is very important because not every player has the same team in their heart. For example, I’m pretty sure even none of my friends love the Chicago Cubs.

Fourth, the company announced new content

how much revenue does xbox generate for microsoft

For its third-party partners, this means more games and services to promote in their libraries and through marketing strategies. Third-party developers gain exposure by having their products featured as an unlockable or playable character in a game that many people will be able to play.

Content creators who are not already part of the Xbox Live community can also use Microsoft’s resources to grow their communities. Using Xbox One consoles, users can create, access, and manage accounts for both XBLPro and Mixer, two music streaming apps owned by Microsoft.

These benefits don’t stop at just entertainment software either. Many companies make money through digital stores. The xbox one online store alone has over 1,000 different apps and games available! By offering these opportunities to others, they stand to profit from it as well.

This is especially important now that Microsoft is investing heavily in creating original video content. These projects include scripted TV shows and movies with big name talent, as well as other types of media like interactive stories and documentaries.

Fifth, the company released its quarterly earnings

how much revenue does xbox generate for microsoft

During this past quarter, Microsoft reported that it made $9 billion in revenue. This is up 8% from last year’s same period!

This number breaks down to show how much money each division at Microsoft makes individually. The most profitable of these divisions was clearly Games, which accounted for more than half a billion dollars in profits. More specifically, the Live Services Division (which includes things like Xbox Game Pass and Mixer) had over one-third of a billion dollars in profit.

The other major division at Microsoft is Office, which has been around longer than any other product line at the company. Since it is still their top seller, it only makes sense that it would bring in more income per copy sold. Unfortunately, they could not give very specific numbers due to competitive reasons.

Sixth, the company announced new subscribers

how much revenue does xbox generate for microsoft

In September 2017, Microsoft revealed that it had hit its goal of 10 million monthly active users for Xbox Live. This was back in May 2016 when they first launched this platform! Since then, more than 11 million people have signed up to use their services through Xbox Live.

This includes not only those who purchase games or access via console but also those who play online multiplayer match-making experiences like Forza Horizon 3, Minecraft, Gears Of War 4 or even Team Fortress 2. These are free to play so there is no cost to join in on the fun!

Not only does Xbox Live get constant engagement from players, it also generates revenue for the company. The service’s microtransactions include things such as extra lives for video games, gold coins for unlocking content and virtual clothing items.

These small purchases add up over time and help keep the game funded for developers while also giving you some additional rewards.

Seventh, the company is launching a new subscription service

how much revenue does xbox generate for microsoft

Over the past year, Microsoft has made some changes to their gaming services that have not been well received by users. The most notable of these switches includes the discontinuation of its Live Gold membership program in September 2017 and the launch of an all-you-can-play streaming service called Game Pass last May.

Both of these moves were met with strong criticism from gamers around the world. Many feel that paying more money for less content is never a good idea and that offering unlimited access to games online is expensive and inconvenient for players who do not have fast internet connections or are unable to connect due to latency issues.

Many believe that both of these initiatives will put pressure on developing companies to offer lower quality content at higher prices, which would hurt the industry as a whole.

Eighth, the company is launching a new product

how much revenue does xbox generate for microsoft

Eight, the company is launching a new console this November. It’s called the Xbox One S and it will cost $249.99. The base model comes with one controller but you can purchase an extra one separately for $39.99.

The Xbox One was released back in 2013 and since then it has been growing in popularity. Since the original launch, there have been two major iterations of the device that include a redesigned look and better graphics.

There are three main reasons why the Xbox platform continues to do well. First, they offer value. Games on the XBox One tend to be priced around the same price as other consoles, if not cheaper. This appealability makes games a lower priority than other things like television or surfing the net.

Second, their online service offers many features. You get free game trials, chat rooms where you can talk with people, achievements and leaderboards which all connect to your account.

Third, the community is very supportive. People discuss games, give tips and help each other out when needed.

Ninth, the company is launching a new service

how much revenue does xbox generate for microsoft

Over the past year, Microsoft has been rolling out a number of services that cater to gamers. This includes its own streaming platform (XBOX Live), game subscription services like Game Pass and xCloud, as well as other products such as Halo Waypoint and Sunset eFootball.

All of these services directly compete with what Sony and Nintendo have already got going on, but none of them are necessarily better than the others in their segment. What they do offer, though, is an ever-expanding library of games, which can be expensive!

With every month’s launch bringing at least one must-have title, it only makes sense to add up all those purchases and see just how much revenue each service generates for Microsoft.

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